2022: A Year in Retrospect
In the past year, Switcheo has seen the evolution of the Carbon and Zilliqa ecosystems, and a growth in the participation of our community. We've developed new features, partnerships, and collaborations which has helped us to better serve our users. We are grateful for the support of our community and partners, and we look forward to continued growth and success in the new year!
Bringing DeFi into Focus
Powered by Carbon, Demex took huge steps forward in the world of DeFi in 2022, opening the door to endless possibilities and making it more accessible to a wider audience. Without further ado, let's revisit the power features launched in its full glory:
- The launch of perpetual swaps was a quantum leap from the financial front, pushing the protocol to a new level of sophistication by offering traders an additional tool to maintain their positions and hedge in the crypto financial market indefinitely, as long as they have sufficient margin to cover any potential losses.
- Where the creation of tokens and markets through submission of governance proposals might have been too complex for non-power users previously, the commission of an intuitive, simplified interface, that allows the community to rapidly list markets and tokens that may hold extrinsic value independently and permissionlessly, empowers community members to act as prediction markets and help improve capital allocation for the protocol.
- Another of our key projects this year was Nitron, a reference money market dApp that demonstrates the capabilities of the CDP module on Carbon. Money markets play a vital role in a well-functioning financial system, and especially so for the Cosmos ecosystem, where the presence of a cohesive money market is lacking. It is for this reason that Nitron was born - to facilitate the flow of short-term funds between borrowers and lenders and see to it that capital is available to those who need it, when they need it.
- It stands to reason that a fully decentralized financial stack would also include a decentralized stablecoin: $USC, CarbonUSD. The aftermath of the Terra collapse left the Cosmos ecosystem with a gaping hole, and with decentralized stablecoins taking the centre stage, Carbon launched its very own over-collaterized, Cosmos-native stablecoin that is governed by SWTH holders. While $USC is still in its budding stages, the coming year will solidify its place as an indispensable and integral part of the Cosmos ecosystem.
The core ethos of Switcheo has always been achieving true decentralization — to enable a world where trust is optional. Carbon was conceptualized and developed with this goal in mind, and in 2022, we moved closer towards this vision, to give traders a truly decentralized experience.
- When it comes to user experience and the quest for true decentralization, it's often the little things that get overlooked, but it is also precisely these tiny improvements that make all the difference. The protocol's support for Flexible Network Fees is a testament to our commitment in placing the choices back to the masses' hands, making onboarding a direct and fuss-free experience for newcomers on Demex.
- Decentralization cannot occur without transparency. As Carbon is a cross-chain blockchain, it only follows that the Hydrogen Monitoring Dashboard was launched, equipping users with full visibility over cross-chain transactions between Carbon and other protocols.
Over on the Zilliqa front, what initially started as a collection to give thanks to the community and celebrate the successful launch of Zilbridge saw the dawn of Zolar and its inhabitants - The Bear Market and Metazoa. This year, Mission I - Takers of the Moon concluded with immense support from the community, with all 2888 Metazoa summoned successfully! Mission II - The Right to Bear Arms is still going strong - with Commander's eagerly rushing to stockpile Z-Ordnances and power up their Metazoa army through Elderberry Juices and Galaxy Gems with their chosen Professions.
This 2023, we look forward to raising the bar for gameplay in Mission III - Battle of the Commanders for all Zolarians! Anticipate elevated game mechanics in the upcoming PvP gameplay.
Work for ZilSwap V2 has not stopped since its launch either! V2 is designed with our users in mind and aims to introduce power features, such as amplified liqudiity pools and, arbitrary token pairs and more, for the Zilliqa community. Look out for the official announcement soon!
Carbon is primed to be the core of DeFi and so it only fits right that the protocol is expanding its list of supported IBC-enabled chains, and fast. In just 2022, we have seen Cosmos Hub, Juno Network, Evmos, Axelar Network and more integrated on the Cosmos front. Click here for the full list of supported chains on Carbon.
We have also joined hands with other blockchain ecosystems to expand DeFi capabilities across larger communities. For one, we teamed up with Stride Zone, a protocol for multi-chain liquid staking in the Cosmos ecosystem, which allows users to unlock the liquidity of their staked assets and compound their yield. This has enabled Nitron to become the first money market in the Cosmos ecosystem to support stAssets ($stATOM and $stOSMO).
Speaking of Nitron, our most recent collaboration with Neo N3 saw the $bNEO lend and borrow pools being incentivised with $2,250 each in $bNEO tokens!
There's more. We joined a series of fireside chats with the wider Cosmos ecosystem! From chatting about perpetual DEXes with Kujira, Vortex and Helix to sharing about money markets with Comdex, Neptune and Umee and hopping on a podcast with Citizen Cosmos, the Carbon ecosystem has actively (and eagerly) engaged in the sharing of ideas and knowledge with fellow peers.
A decentralized protocol that is governed by the community and driven by healthy conversations is the ultimate goal, and we are glad to see this becoming a reality. As we navigate full-force into 2023, we are excited to continue exploring new possibilities in the DeFi space, with our established partners and new allies alike.
By The Numbers
Carbon’s Genesis Block was mined on 11 January, 2022. The technical delivery of our original vision - to nurture an ecosystem that will serve as the basis for a decentralized future - was an extraordinary milestone, but gained even more significance as the marker for a brand new IBC era with the debut of $SWTH as an IBC-enabled multi-chain token. Since then, we have consistently secured over 36 million blocks to the network with minimal interruptions.
That's not all! As the protocol expands and more validators join, the security of our chain has improved as well. As of now, 1.2 billion SWTH have been staked by the 16 active validators on the network.
As the year slowly unfolded, the Carbon blockchain has proved itself a force to be reckoned with, breaking new grounds and achieving consistently even lower block times of 1.9s, down from the already low block times of 2.1s previously, bring about even faster transactions for users. To date, the chain has surpassed 190 million total transactions on Demex and 100,000 cross-chain relays on Hydrogen.
Since the launch of the CDP module, Carbon has quickly seen over $2.8M locked in its lending/borrowing pools on Nitron, with the TVL on-chain amounting to over $5M. While this metric alone doesn’t define the chain's health, it is one part of a bigger picture demonstrating overall ecosystem sustainability.
Trading volume for perpetuals has been increasing daily too, reaching a peak of almost $775,000 in a single day. This is impressive progress for our initial two perpetual markets. We anticipate even more growth in 2023 with the upcoming launch of $OSMO, $ATOM and $KUJI perpetual swaps.
We also expect spot trading volumes to continue to increase as we are set to introduce spot margins, which will allow users to borrow additional funds for trading. This will lead to higher liquidity and more arbitrage opportunities, thereby increasing market efficiency.
As $SWTH stakers already know, block rewards on Carbon comprise of both SWTH emissions and fee rewards (trading commissions, network fees and CDP fees). This means that staking $SWTH earns rewards whenever trades are executed and money market activities (e.g. borrowing) are carried out. With trading volume and money market activities taking off, there has truly never been a better time to adopt $SWTH and become a validator!
As staking rewards comprise of trading commissions, with more tokens being listed permissionlessly on Demex, staking SWTH earns a growing myriad of tokens.
In 2023, we look forward to exploring more ideas with you.
Community At Our Core
Building in the bear market may not be the easiest task, but our vocal and passionate user base goes a long way in helping us to refine and improve our features. We were pleased to see the community coming together to promote the growth of the protocol by participating in discussions about governance proposals, building relationships with other communities, and even organizing community-led giveaways and campaigns through the @NitronMM and @SwitcheoSquad community Twitter channels, particularly in the lead-up to the Nitron Mainnet launch. The impact of these community-driven efforts has been significant and has helped to drive Carbon and Demex forward.
More nodes translate to greater decentralization and higher chances of finding good latency for different users (i.e. faster transaction execution) on the Carbon blockchain. When the Public Community Nodes was first released in late July, BlockHunters took the lead and joined our quest to advance financial democratization. Users can now toggle between the Switcheo Labs and BlockHunters API Nodes for a heightened and secured user experience.
In the past year, the team has set in stone some initiatives with the community in mind:
- Since May, Demex has been hosting monthly trading competitions - namely the Takers vs Makers Futures Competition, and the Top Gainers and Top Traders Perpetual Competition - to encourage the community to engage with trading futures and perpetuals and thus promote trading activity. On top of that, the competitions also present an opportunity for traders to tap into their competitive spirit and connect with and learn from other traders, fostering a sense of camaraderie and community!
- Users can now receive up-to-date, timely information on the mercurial trading market with Demex Signals. This includes a handy overview of important trading events to look out for at the start of every month, allowing traders to adjust their positions accordingly.
- Switcheo Research, which we think of as the intellectual muscle of the team, has also started to cover the current themes, developments and breakthroughs within the space in a new series aptly named Strategies. Coupled with the trading competitions and Demex Signals, we hope this series can help to educate community members about different trading strategies and techniques, as well as the risks and rewards of trading in the market!
- On the user-facing end, we focused our efforts on improving user experience and this year we pushed out a bunch of UI updates to do exactly that on Demex:
- Last but not least, we’ve kickstarted a series of Twitter Spaces for both Carbon and Demex to engage with the community in a more immediate, meaningful way. This provides an additional avenue for the team to communicate with the community in real time and provide timely updates on the protocol roadmap.
The power of community is undeniable in making a significant and meaningful impact. We are filled with excitement and anticipation at the thought of what we can achieve together in the coming year - Let's join hands and collaborate to make 2023 a year of positive change!
In 2023, Switcheo looks to mainstream adoption, innovation - and DeFi
All anyone needs to know about how crypto is going as we bid farewell to 2022 is to look at the careening headlines across the past 12 months. The unnerving failures of 3AC, Celsius, and FTX, which otherwise could have been a triumphant moment for the web3 space, turned out to be a disappointing reminder that the centralized institutions and power structures we aimed to transform still exist and exert influence. These collapses have caused turmoil in the web3 industry, and it is only all too easy to stare down the barrel of crypto winter and call it closing time.
Yet 2022 was also the year the Ethereum Merge - a technical upgrade years in the making - happened. As did a score of exciting developments in the space, such as when the Carbon Mainnet went live, or that time when we got things ready for $USC, Carbon’s native stablecoin. Despite the challenges, the team remains committed to building a more equitable and sustainable financial system. We envision a system in which individuals and centralized institutions cannot exploit trust to accumulate wealth and power at the expense of others, but instead, value is distributed to all, and upheld by all.
2023: Same mission. More innovation. Greater decentralization.
Part II of the article covering the protocol roadmap and vision for 2023 is currently underway - Stay tuned!
About Switcheo Labs
Switcheo Labs is an experimental think tank that combines the brightest minds with a cutting-edge software development lab. We focus on nurturing ecosystems that are forming the foundation of a new, decentralized world — one that thrives even without trust.
With this goal in mind, the team developed a blockchain solution where finance is truly censorship-resistant and decentralized — Carbon, a custom application-specific cross-chain protocol that acts as a building block for DeFi. A promising use case for Carbon is seen in Demex, a reference trading UI for Carbon and the world’s first fully decentralized derivatives platform.
Join us in rethinking trust by: